NEW YORK (TheStreet) -- Shares of Sonic Corp. (SONC) are gaining 4.7% to $34.09 on Wednesday afternoon, after the Oklahoma City-based company reported better-than-expected results for the 2016 second quarter.
After yesterday's closing bell, the drive-in restaurant chain posted adjusted earnings of 18 cents per share, exceeding analysts' expectations of 16 cents per share.
Revenue was $133.16 million, higher than Wall Street's projections of $127.73 million.
Same-store sales climbed 6.5% during the period, which beat consensus estimates for an increase of 1.6%.
Continued strength in core menu items and limited-time promotions boosted results during the quarter, the company said.
Additionally, Sonic now projects that adjusted earnings per share will rise 20% to 25% for fiscal 2016, above its previous forecast for an increase of 16% to 20%. The restaurant operator also said it expects same-store sales to grow by 4% to 6%.
TheStreet's Jim Cramer, Portfolio Manager of the Action Alerts Plus charitable trust, commented on Sonic's earnings results in the above video: "Sonic reported unbelievable same-store sales...They have very centralized value meals, they're a great franchiser, they're buying back stock and beef costs are down."
Jefferies raised its price target on the stock to $34 from $30 and maintained its "hold" rating following the results.
The firm said surprisingly strong sales momentum continues despite industry headwinds.
Separately, TheStreet Ratings Team has a "Buy" rating with a score of B- on the stock.
This is driven by a number of strengths, which should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks covered.
The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, revenue growth and expanding profit margins.
The team believes its strengths outweigh the fact that the company shows weak operating cash flow.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: SONC